The Tennessee Court of Appeals has ruled for the buyer of property at a local back tax sale against a trust that made a claim based on paying the original owner $500 for a quitclaim deed.
Chancellor Pam Fleenor had ruled in favor of Basswood Revocable Land Trust and against the buyer, REO Holdings LLC. The Appeals Court reversed her decision.
The ruling written by Judge Charles Susano Jr. says: Darryl L. Patton and Kermetta J. Patton owed a total of $12,559.28 in property taxes to Hamilton County and the City of Chattanooga. Accordingly, the trial court entered an order directing the sale of the Pattons’ property in satisfaction of their unpaid taxes. In June 2015, the clerk and master’s office for Hamilton County sold the Pattons’ property at a public auction. The highest bidder, REO, purchased the property for $20,000.
"On June 24, 2015, the trial court entered an order confirming the sale. Pursuant to Tenn. Code Ann. § 67-5-2701, the order provided that “the redemption period with respect to the Property is one (1) year, beginning on the date of the entry of this Order Confirming Sale.” On June 21, 2016, the Pattons quit claimed their remaining interest in the property to the Trust in exchange for $500.
"On June 24, 2016, the Trust filed a motion to redeem the property and tendered $15,184.41 for the payment of the delinquent taxes plus interest and court costs. REO filed a motion to protest the redemption, setting forth two reasons that the redemption should be denied.
"First, REO argued that the Trust was not entitled to redeem the property because the Trust did not have an interest in the property “as of the date of the sale,” as required by Tenn. Code Ann. § 67-5-2701(a)(3)(C). Second, REO argued that the motion to redeem was untimely because the property was abandoned and the redemption period should have been shortened to thirty days pursuant" to another section of state law.
Attorney Charles Walker of Nashville represented REO Holdings LLC.